Clinical Integration:

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Clinical Integration a Strategy for Physician
Alignment, Better Quality, and Collective Payer
Contracting
John Marren Thomas Babbo jpm_at_hmltd.com
tjb_at_hmltd.com Hogan Marren, Ltd. ? Chicago,
Illinois [phone]
March, 2009
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Agenda

• 1. Update on Clinical Integrationthe national
  health care perspective
• The FTC perspective
• MGOs efforts to date
• What it takes to be Clinically Integrated
• Contracting with payors

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Lets be specific

• Physicians can align with each other and
  hospitals to
• (1) distinguish themselves in the market on the
  basis of quality
• (2) justify higher reimbursement
• (3) conduct collective negotiations with health
  plans

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What do we know about todays health care
environment?
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The solution is physician alignment

• Through employment
• Through management models
• Through clinical integration

clinical integration
Combining the efforts of employed, managed, and
independent doctors
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What does CI achieve?

• Fosters collaboration among doctors and hospitals
  in a way that increases the quality and
  efficiency of patient care
• Presents doctors and hospitals a powerful
  business and clinical strategy to thrive in the
  advent of consumerism, pay-for-performance, and
  quality report cards
• Allows physician networks to assert themselves
  forthrightly in collective negotiations with
  health plans and/or employers

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What do we know about CI?

• If Clinical Integration is defined as

... an active and ongoing program to evaluate
and modify practice patterns by the network's
physician participants and create a high degree
of interdependence and cooperation among the
physicians to control costs and ensure quality .
. .
then we know at least three things
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What do we know?

• First, CI is not

• The messenger model

• Risk contracting redux

• Payor-driven P4P

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What do we know?

• the FTC has said a lot about Clinical
  Integration.

Second,
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• The FTC staff considered the "explicit
  admission" by GRIPA that one objective of the
  plan was to contract at higher fee levels for the
  services of physician-members.

• Ordinarily, such an objective would raise
  concerns that higher prices would result from the
  exercise of market power, the FTC staff said.

• "Here, however, GRIPA's higher fee levels are
  anticipated as part of a program that seeks, and
  through the participants' integration appears to
  have significant potential to achieve, greater
  overall efficiency and improved quality in the
  provision of medical care to covered persons.

• Based on the information provided, the FTC staff
  letter said, it appeared that GRIPA's joint
  negotiation of contracts, "including price terms
  with payers on behalf of its physician members
  who will be providing medical services to payers'
  enrollees under those contracts is subordinate
  to, reasonably related to, and may be reasonably
  necessary for, or to further, GRIPA's ability to
  achieve the potential efficiencies that appear
  likely to result from its member physicians'
  integration through the proposed program."

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May 28, 2008 FTC Conference Center601 New
Jersey Avenue, N.W.Washington, DC 20001
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antitrust laws forbid collective negotiations
In other words,
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unless youre really clinically integrated

• An analysis of any physician networks clinical
  integration program is essentially a three-part
  test which asks
• whether the networks clinical integration
  program is real
• containing authentic initiatives, actually
  undertaken by the network, which involve all
  physicians in the network, and apply to the
  physicians practice patterns relative to
  patients who obtain health benefits under
  fee-for-service health plans
• whether the initiatives of the program are
  designed to achieve likely improvements in health
  care quality and efficiency and
• whether joint contracting with fee-for-service
  health plans is reasonably necessary to achieve
  the efficiencies of the clinical integration
  program.

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What else do we know?
Third,

• many lawful, well-constructed CI programs have
  and are being developed across the country . . .

So, we need to get going!
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Current Successful CI Models

• Advocate Physician Partners
• Brown Toland Medical Group
• Greater Rochester IPA
• MedSouth
• St. Lukes Magic Valley
• Memorial Hermann HNP
• Covenant Health Partners
• Etc.

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Achieving CI a phased approach

• Evaluate CI Readiness
• Build Physician Hospital Consensus
• Establish Network Organization
• Develop CI Initiatives
• Select Deploy CI Infrastructure
• Engage Regulators
• Implement CI Program
• Commence CI Contracting

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Health System


Physicians

Health Systems
CI
Operations
Company


Payors


Employer/

Community

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Health



CI
Operations
Company


Payors


Employer/

Community

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Examples of CI initiatives MGO is considering

• Clinical
• Readmission within 30 days of patients discharged
  with a diagnosis of heart failure
• Prophylactic antibiotic selection for surgical
  patients
• Ambulatory management of patients with GERD

All of these can be measured now!

• Non- Clinical
• Electronic Connectivity high speed internet
  e-mail
• Attendance at CI information meetings
• Completion of on-line assessments and courses

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www.advocatehealth.com Search for 2008 Value
Report (http//www.advocatehealth.com/physpartn
ers/about/employers/value_report.html) Or call
1.800. 3ADVOCATE
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Infrastructure building on a solid foundation

• Networks of independent physicians that are
  affiliated with hospitals or health systems enjoy
  a distinct advantage in the development of CI
• Existing OhioHealth QI and patient safety
  initiatives
• Established MGO/OHG medical management activities
• MGO/OhioHealth/OHG investments in advanced
  clinical technologies and information systems
• The presence of such infrastructure greatly
  accelerates the implementation of a comprehensive
  CI program
• The CI activities of the MGO/OHG entail
  reorientation and realignment of this
  infrastructure, rather than building basic CI
  competencies

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Hospital Systems
Ambulatory Claims

• MGO billing program
• Med3000 PMS
• Aetna claims
• OhioHealth benefits

• MIDAS
• MIDAS DataVision
• EMR/CPOE
• ORB
• Existing QI Programs

Ambulatory EMR (good to have, but not necessary)
Med3000 Data Warehouse
Physician Profiling and Actionable Reports
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Food for thought

• Though creating clinically integrated
  organizations is difficult and expensive,
  physicians should recognize that clinical
  integration can help them both to gain some
  negotiating leverage with health plans and to
  improve the quality of care for their patients.
• Lawrence P. Casalino M.D., Ph.D., University of
  Chicago
• The Federal Trade Commission, Clinical
  Integration, and the Organization of Physician
  Practice, Journal of Health Politics, Policy and
  Law, 2006, Duke University Press, 31(3)569-585
  DOI10.1215/03616878-2005-007

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MGO efforts to date

• A brief history -
• 2005 -
• Representatives from OHC and MGO began meeting to
  discuss PHO contracting and market changes.
• Clinical Integration was adopted as the go to
  market strategy of the PHO.
• The OHG Board formed a PHO Strategy Team with
  representatives from OHG, MGO and OHC.
• 2006 -
• The PHO Strategy Team developed a clinical
  integration implementation plan.
• A pilot program with OhioHealth as the employer
  was proposed.

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MGO efforts to date(continued)

• 2007 -
• OHG populated a data warehouse with three years
  of OhioHealth employee and dependent claims data.
• A pilot pay for quality (P4Q) program that
  incentivizes MGO physicians to support
  OhioHealthy initiatives was planned.
• 2008 -
• The MGO Board adopted clinical integration as the
  organizations primary strategic initiative
• The pilot pay for quality program focused on
  OhioHealth associates and dependents was
  implemented.
• Aetna, a payer, agreed to provide claims data for
  the data warehouse to expand the pay for quality
  program in 2009.
• The PHO Strategy Team transitioned to the
  Clinical Integration Development and
  Implementation Team (CI DIT).

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Clinical Integration Development
Implementation Team
CI DIT Core Committee
Chair Dr. ____________ CMO
MGO/OHG Vice Chair Bruce Vanderhoff, MD CMO
OH Interim Chair Tom Thompson
COO OHG
OH Reps Mike Louge Exec. VP and CFO
Paul Patton VP Human
Resources - Interim MGO Reps John Burns, MD
Ben Humphrey, MD
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What it takes to be CI

• Network of physicians committed to Clinical
  Integration
• A set of initiatives that impacts all
• An infrastructure that supports CI
• And, most importantly,--the proper narrative

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Next steps for MGO

• Ask physicians to participate in the clinically
  integrated network
• Begin marketing the program to employers and
  payers

• Develop a strategy for engaging payors
• Aetna Anthem Cigna
• Medical Mutual UHC